BoE names De La Rue preferred bidder for banknote printing

(Clarifies contract includes paper printing)

LONDON, Sept 8 (Reuters) - The Bank of England (BoE) has named British banknote printer De La Rue Plc (Other OTC: DELRF - news) as preferred bidder for its polymer and paper banknote printing contract.

The company, which has printed Britain's banknotes since 2003, is expected to sign an extended 10-year contract in October and to commence printing in April 2015, the BoE said in a statement on Monday.

Shares (Frankfurt: DI6.F - news) in De La Rue were up 3.5 percent to 769 pence by 0846 GMT, after climbing to a session high of 775p, their highest in nearly two months.

De La Rue, which makes more than 150 national currencies and UK passports, added polymer banknotes to its business in 2012 but lost out in March on a 10-year contract to supply polymer to the BoE to a company called Innovia Security.

The company will begin printing the Bank of England's five pound notes on polymer from the second half of 2016 and its ten pound notes a year later. It will continue to print 20 and 50 pound banknotes on paper.

Britain is one of the largest economies so far to adopt plastic banknotes, which the BoE has said would last twice as long as paper currency and save it around 1 billion pounds ($1.62 billion) over the next 10 years. ($1 = 0.6192 British Pounds) (Reporting by Li-mei Hoang; Editing by Paul Sandle and David Holmes)